China’s ambitious initiative aims to unite nine cities in the country’s Southern Guangdong province with Hong Kong and Macau to create an innovation powerhouse that will rival economic hubs such as San Francisco and the Tokyo Bay Area.

“In the past, south China was perceived as being a difficult market to invest because of the tight yields and as a result a lot of money went to Shanghai and Beijing. But the government’s promotion of the GBA is now drawing more overseas developers and investors to the region,” says Denis Ma head of research, JLL Hong Kong.

The area has a combined GDP of US$1.5 trillion and a population of 68 million – both of which are attracting foreign companies and international investors.

“Until now, much of the investment into Chinese real estate has been domestic,” says Ma.

But developers from Hong Kong are looking to expand on the mainland with major players already investing in excess of CNY 5 billion, including Wharf Holdings and Kerry Properties.

Singaporean investors are having an impact, too, while Taiwan has overtaken the U.S. to become the third biggest cross-border investor into GBA cities.

Hong Kong, Shenzhen, and Guangzhou will receive the most investment but the smaller cities will see the spill over effect as their economies advance.

China’s goal is to speed up development in second and third tier cities in Guangdong Province and move their economies away from industrial production and toward high tech in an effort to attract talent, both local and foreign.

Some are already experiencing rising house prices. Dongguan and Foshan, previously industrial cities near Guangzhou, have witnessed the biggest gain in property prices in the last 18 months.

“Chinese developers will inevitably dominate the residential development market in these cities, but we are seeing more foreign investors looking for mixed-used opportunities in these tier II cities in order to capture the market growth” says Silvia Zeng, head of research for south China, JLL.

She points to retail as an attractive sector for foreign investors, who may take advantage of ‘smaller but high quality assets’ and the promising population growth.

“For most investors the reality is that, beyond Guangzhou and Shenzhen, land is cheaper and there is more scope for growth,” adds Zeng.

The opening of China’s capital markets could further spur foreign investment into real estate as well as financing opportunities.

Some listed developers are expected to seek offshore financing because of tighter government policy while others want to widen their development’s appeal among overseas businesses.

“Some state-owned or local developers are willing to consider joint ventures with foreign investors,” adds Zeng.

While hopes for growth have been pinned on the recently opened Hong Kong–Zhuhai–Macao Bridge, Ma says the region’s wider infrastructure plans will go further to cut travel times and increase the area’s appeal as a base for business.

Chinese policymakers released the blueprint for the development last month and the end result, she says, is a, ‘win, win for everyone’: “The big population will make the GBA a magnet for talent and this, ultimately, will drive growth.”